Fixed mortgage rates jump: Freddie Mac

Housing-market news causes rates to rise, economist says

CHICAGO (MarketWatch) — Rates on the 30-year fixed-rate mortgage jumped this week, after data showed improvement in the housing market, according to Freddie Mac’s weekly survey of conforming mortgage rates, released on Thursday.

Rates on the 30-year fixed-rate mortgage averaged 3.98% for the week ending Jan. 26, up from 3.88% last week. The mortgage averaged 4.8% a year ago. Even though rates rose this week, the mortgage still is relatively low — the 30-year mortgage has averaged below 4% for eight weeks.

Fifteen-year fixed-rate mortgages also rose, averaging 3.24%, up from 3.17% last week. Rates on the mortgage averaged 4.09% a year ago.

Adjustable-rate mortgages showed less movement this week, with the 5-year Treasury-indexed hybrid adjustable-rate mortgage averaging 2.85%, up from 2.82% last week. The ARM averaged 3.7% a year ago.

And 1-year Treasury-indexed ARMs averaged 2.74% this week, unchanged from last week and down from 3.26% a year ago.

To obtain the rates, the 30-year fixed-rate mortgage and the 5-year ARM required payment of an average 0.7 point, while the 15-year fixed-rate mortgage required payment of an average 0.8 point and the 1-year ARM required an average 0.6 point. A point is 1% of the mortgage amount, charged as prepaid interest.

“Fixed mortgage rates ticked up this week as the housing market ended 2011 on a high note,” said Frank Nothaft, vice president and chief economist of Freddie Mac, in a news release. “New construction of one-family homes rose 4.4% in December to an annualized rate of 470,000, the most since April 2010. Existing-home sales increased 5% at the end of the year to 4.61 million houses, the largest amount since May 2010.” Read more: Existing home sales climb 5% in December.

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